International Economics - The Final Quiz - Part 2

9 Questions | By Scannerdarkly | Last updated: Mar 20, 2022 | Total Attempts: 50

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1.

If in a 2 products-2 country word, a country has an absolute disadvantage vis-a-vis the another country, opening to trade will decrease its average productivity.
- A.
  
  True
- B.
  
  False
2.

Two countries, the Kingdom of Lesotho (L), and the Union of Comoros (C), work in a perfect "Ricardian model", producing two goods: Oil (O), and Bread (B). Knowing that: . the two countries are open to trade. . there is no mark-up between the TC and the price of the goods. . The production possibility frontier of Lesotho is (express in unit of bread and unit of oil): B = -0.5*O + 1000 . Lesotho has a workforce equal to 200 workers. . The production possibility frontier of Comoros is: B = -2*O + 750 . Comoros has a workforce equal to 300 workers. . The international price of oil is equal to 1$ per unit of bread. What is the level of wage in the two countries?
- A.
  
  Lesotho: 5$/unit produced, Comoros: 2.5$/unit produced
- B.
  
  Lesotho: 10$/unit produced, Comoros: 5$/unit produced
- C.
  
  Lesotho: 10$/unit produced, Comoros cannot be determined
- D.
  
  The two countries have the same level of wage equal to 5$/unit produced
- E.
  
  There are not enough data to answer
3.

Which of these factor does NOT depend on the indifference curve of the demand, in the Ricardian model?
- A.
  
  The Gain from Trade of the country
- B.
  
  The international price
- C.
  
  The amount of Exportation and Importation of the country
- D.
  
  The sector in which the country shall specialize
- E.
  
  A + D
4.

Two coutnries, Comm (C), and Unity (U), work in a Ricardian model, and have recorded these data: ac au [worker-hour for prduce one unit] (A) Antennas 10 15 (C) Cars 23 20 (M) Microchips 0.5 1 (X) Xylophone 1 0.6 (Y) Yatch 240 120 and the level of wage is 26$/worker-hour for C, and 22$/worker-hour in U. In which sector C has a comparative advantage?
- A.
  
  C and Y
- B.
  
  A, C, and M
- C.
  
  A and M
- D.
  
  A and X
- E.
  
  In none of them.
5.

Divide the following assumption in the right group: R --> Ricardian model assumtpion, HO --> Hesker-Olin model assumption. 1. Identical Technologeis through countries. 2. Perfect Competition. 3. Perfect mobility of factor across countries. 4. Constant return to scale.
- A.
  
  R: 1,3; HO: 2,4
- B.
  
  R: 2; HO: 1,4
- C.
  
  R: 2,4; HO: 1,2,4
- D.
  
  R: 1,2,4; HO: 2,3,4
6.

If along an isoquant of production Q(K,L), the point X1 has K/L higher than the point X2, it is true to say that increase the capital used of one unit in X1 will imply a deltaL higher (in absolute terms) than in X2.
- A.
  
  True
- B.
  
  False
7.

A country has a production possibility frontier, referring to the product C (capital intensive) and F (labor intensive), shown in the image. Given that the country have more unit of Labor than Capital, it is true to say that the country has a comparative advantage in F.
- A.
  
  True
- B.
  
  False
- C.
  
  There are not enough data to answer
8.

A firm in Italy use two factors to operate: capital and labor. These data are give: Cost of an additional unit of labor: 12€ Cost of an additional unit of capital: 35€ MPL: 142 MPK: 368 What is your suggestion for the company?
- A.
  
  The company should increase the Labor used, in order to reach the equilibrium
- B.
  
  The company should increase the Capital used, in order to reach the equilibrium
- C.
  
  The company is in the equilibrium
- D.
  
  There are not enough data to answer
9.

C and F are two goods, capital and labor intensive. It is possible to produce, with the same amount of K and L, both a specific quantity of C and a specific quantity of F? (That is, is possible to select a combination (K,L) that allow the production of both C and F, in different quantities?)
- A.
  
  Yes
- B.
  
  No
- C.
  
  Boh